Strattec Security Corp (STRT) outlined its transformation strategy at the 17th Annual Midwest IDEAS Conference on Thursday, highlighting restructuring savings, margin expansion and a renewed share buyback program.
The Milwaukee-based auto parts supplier reported a 21% workforce reduction over two years, generating $9.5 million in restructuring savings. Jennifer Slater, president and CEO, noted the company has trimmed its headcount to align with lower production volumes while maintaining operations across its core facilities. Strattec’s 350,000-square-foot Milwaukee plant, currently operating at about 50% capacity, has freed up 91,000 square feet of space as part of the optimization effort.
Financial performance improved in fiscal 2026, with gross margin rising to 16.5% from 15% a year earlier—a 150-basis-point increase. Pricing benefits contributed $15.6 million to revenue, though this was partially offset by $1.4 million in pricing gains lost due to canceled electric vehicle programs. Net income grew 10% year-over-year, while adjusted diluted earnings per share climbed 27.9% to $6.88 from $5.38. The company ended the period with $108 million in cash and no debt, generating roughly $10 million in normalized quarterly cash flow.
Strattec also re-established a $40 million share buyback program, repurchasing 110,000 shares for $7.4 million in the most recent quarter—the first buyback in about three decades. Selling, general and administrative expenses rose by $7 million to 11.9% of sales but are expected to normalize between 11% and 12%, with $0.5 million in restructuring savings providing partial relief. Foreign exchange pressures reduced gross margin by $4.8 million.
The company’s customer base remains concentrated, with Ford, General Motors and Stellantis accounting for 65% of sales. Strattec is expanding early engagement with automakers, shifting from traditional request-for-quotation processes—which typically occur two to three years before vehicle launches—to collaborations five or more years ahead of production. Slater emphasized the strategic shift as critical for delivering advanced technologies, including ultra-wideband digital key fobs replacing RFID systems.
Operational updates included a 9% automation rate across facilities, with 16 stations automated over the past year. Strattec’s business is structured around three pillars: Permission (locks and keys), Movement (actuators and sliding doors) and Retention (latches and cinching systems). The company reported 95% compliance with USMCA trade agreements.
Looking ahead, Strattec projects North American production to decline by 2% through fiscal 2027, with its addressable customer base expected to shrink by 6% over the same period.
